Crossgate Capital

[Sideshow Bob]

Noticed new entity on the USX today.

Crossgate_Capital_Annual_Report_2021.pdf (usx.co.nz) (https://www.usx.co.nz/uploads/paperclip/documents/2273/original/Crossgate_Capital_Annual_Report_2021.pdf?162310269 7) Main activity is Cryptocurrency investing.

Not alot about directors/management but noted they were all involved in Senior Trust (NZX:SRF). Bit of a change from retirement villages to crypto currency....

[Tony Two Gloves]

Noticed new entity on the USX today.

Crossgate_Capital_Annual_Report_2021.pdf (usx.co.nz) (https://www.usx.co.nz/uploads/paperclip/documents/2273/original/Crossgate_Capital_Annual_Report_2021.pdf?162310269 7) Main activity is Cryptocurrency investing.

Not alot about directors/management but noted they were all involved in Senior Trust (NZX:SRF). Bit of a change from retirement villages to crypto currency....
I looked into buying shares with them a while back but found it wasn't that hard to set up wallets etc myself. I do like their safe storage etc and I think their portfolio of currencies looks good. The SP will be based on the current value of their holding so I expect a bit of volatility in this one. Saying that if you want some exposure to Crypto this is a very easy way to be involved. Actually their SP was getting close to $6 a few months ago now at $3.99 on their website such are the big movements at the moment.

[Sideshow Bob]

I looked into buying shares with them a while back but found it wasn't that hard to set up wallets etc myself. I do like their safe storage etc and I think their portfolio of currencies looks good. The SP will be based on the current value of their holding so I expect a bit of volatility in this one. Saying that if you want some exposure to Crypto this is a very easy way to be involved. Actually their SP was getting close to $6 a few months ago now at $3.99 on their website such are the big movements at the moment.

From their annual "review" for the year ended 31/3/21

The revaluation of Crossgate Capital’s investment assets for financial reporting purposes was undertaken on a specific date being 31 March 2021, which resulted in our Share price, after tax, being Letter From the BoardInstitutional capital entering the cryptocurrency market is the direction of travel that we envisaged. During the year the cryptocurrency market has seen significant growth. CROSSGATE CAPITAL LTD 5reported as $4.70. When the offer opened on 1 April 2019, the Share price was $1.00. Since inception we report a $2.7m increase in the fair value of our investments which at year-end has resulted in Crossgate Capital holding $3.5m of cryptocurrencies

As above, holding $3.5m in crypto (total assets $3.6m) as at 31/3/21, with 3.6m shares on issue, but they are valued at $4.70?? As you say, can only base their value on the current value of their holding, and there would be some big swings at times.

Shares obviously allocated/bought for alot less than the initial price of $1/each

Would be interested how their stated "share price" is formulated, as surely even at $3.99, the share price is over-egged??? ie share price too high relative to the value of assets, unless they've had a stellar 2.5months, and increased the value of crypto to 3.6m x $3.99 = $14.36m??

[Tony Two Gloves]

From their annual "review" for the year ended 31/3/21

The revaluation of Crossgate Capital’s investment assets for financial reporting purposes was undertaken on a specific date being 31 March 2021, which resulted in our Share price, after tax, being Letter From the BoardInstitutional capital entering the cryptocurrency market is the direction of travel that we envisaged. During the year the cryptocurrency market has seen significant growth. CROSSGATE CAPITAL LTD 5reported as $4.70. When the offer opened on 1 April 2019, the Share price was $1.00. Since inception we report a $2.7m increase in the fair value of our investments which at year-end has resulted in Crossgate Capital holding $3.5m of cryptocurrencies

As above, holding $3.5m in crypto (total assets $3.6m) as at 31/3/21, with 3.6m shares on issue, but they are valued at $4.70?? As you say, can only base their value on the current value of their holding, and there would be some big swings at times.

Shares obviously allocated/bought for alot less than the initial price of $1/each

Would be interested how their stated "share price" is formulated, as surely even at $3.99, the share price is over-egged??? ie share price too high relative to the value of assets, unless they've had a stellar 2.5months, and increased the value of crypto to 3.6m x $3.99 = $14.36m??
Hmmm interesting, the SP on their website is $3.99 as at 9/6 so unless the number of shares is incorrect and they were issuing more shares to get down to the $1.00 mark? They have there portfolio on their website also and I would suspect those coins are down significantly. BTC was $83K NZD on the 1/4 and is now $52K and the smaller coins have been savaged more - unfortunately I hold a lot of the same coins as they do......

[Sideshow Bob]

Number of shares from here:

CCL_Issuer_Profile_2021.pdf (usx.co.nz) (https://www.usx.co.nz/uploads/paperclip/documents/2273/original/CCL_Issuer_Profile_2021.pdf?1623102697) 3.609m on issue

Company Registry - 3.65m Shareholdings (companiesoffice.govt.nz) (https://app.companiesoffice.govt.nz/companies/app/ui/pages/companies/6950493/shareholdings)

Looking at the documents, as at 31/3/21 they have 3.58m. Looks like new shares have been issued about 9 times since then - most of the time just a few thousand here or there.

Judging by the documents, since its inception, as shares have been sold, they have simply issued more.

Start of 2019, total shares were 3,000,000 to the 3 main shareholders/directors, and they still own the 3,000,000 - so would must been issued at XX cents each? Can't have been at $1 each (their stated value) as the company would had $3m in assets then, so wouldn't have had the growth that they state - ie assets now of $3.6m, and couldn't back the increase in share price.

As you mention TGT, large holding of BTC which is down heavily since the annual review - so hard to see how they quadrupled their net assets to justify the $3.99 valuation. Especially as don't seem to be trading. From their website:

The indicative long term portfolio weightings are provided below. To mitigate any unnecessary transaction fees or tax implications, we re-weight the portfolio through purchases as opposed to selling any of the cryptocurrencies.
Then as writing this post, I noticed another announcement! (Not yet on companies website)

DL9_Corportate_Actions_09.06.21.pdf (usx.co.nz) (https://www.usx.co.nz/uploads/paperclip/documents/2274/original/DL9_Corportate_Actions_09.06.21.pdf?1623307566)

So every new share appears to raise the net asset per share. Hard to sell how they value their shares, especially as just keep issuing more!!

Not sure what happens when they start to trade on the USX, no bids or offers so far. Will someone pay $3.99?? Or will they trade at a discount or premium!! Needs to be almost a daily or weekly NTA per share to be able to trade them.

Simply just not an investment for me (especially at $3.99) - just a morbid fascination on how structured and value themselves! And not clear to me. :confused:

[Tony Two Gloves]

Number of shares from here:

CCL_Issuer_Profile_2021.pdf (usx.co.nz) (https://www.usx.co.nz/uploads/paperclip/documents/2273/original/CCL_Issuer_Profile_2021.pdf?1623102697) 3.609m on issue

Company Registry - 3.65m Shareholdings (companiesoffice.govt.nz) (https://app.companiesoffice.govt.nz/companies/app/ui/pages/companies/6950493/shareholdings)

Looking at the documents, as at 31/3/21 they have 3.58m. Looks like new shares have been issued about 9 times since then - most of the time just a few thousand here or there.

Judging by the documents, since its inception, as shares have been sold, they have simply issued more.

Start of 2019, total shares were 3,000,000 to the 3 main shareholders/directors, and they still own the 3,000,000 - so would must been issued at XX cents each? Can't have been at $1 each (their stated value) as the company would had $3m in assets then, so wouldn't have had the growth that they state - ie assets now of $3.6m, and couldn't back the increase in share price.

As you mention TGT, large holding of BTC which is down heavily since the annual review - so hard to see how they quadrupled their net assets to justify the $3.99 valuation. Especially as don't seem to be trading. From their website:

The indicative long term portfolio weightings are provided below. To mitigate any unnecessary transaction fees or tax implications, we re-weight the portfolio through purchases as opposed to selling any of the cryptocurrencies.


Then as writing this post, I noticed another announcement! (Not yet on companies website)

DL9_Corportate_Actions_09.06.21.pdf (usx.co.nz) (https://www.usx.co.nz/uploads/paperclip/documents/2274/original/DL9_Corportate_Actions_09.06.21.pdf?1623307566)

So every new share appears to raise the net asset per share. Hard to sell how they value their shares, especially as just keep issuing more!!

Not sure what happens when they start to trade on the USX, no bids or offers so far. Will someone pay $3.99?? Or will they trade at a discount or premium!! Needs to be almost a daily or weekly NTA per share to be able to trade them.

Simply just not an investment for me (especially at $3.99) - just a morbid fascination on how structured and value themselves! And not clear to me. :confused:
Not clear to me either! Feel it really needs to be easy to understand and it would be very easy to have a current value of their holdings on their website updated daily and from this a fair value of each share could be easily calculated. I to am interested in this but will not be buying shares as it is relatively simple to invest yourself with no ongoing fees and you get to keep the income from the coins if staked. I wonder if they knew about Catalist coming to the market as may have been easier and cheaper than USX.

[Sideshow Bob]

Not clear to me either! Feel it really needs to be easy to understand and it would be very easy to have a current value of their holdings on their website updated daily and from this a fair value of each share could be easily calculated. I to am interested in this but will not be buying shares as it is relatively simple to invest yourself with no ongoing fees and you get to keep the income from the coins if staked. I wonder if they knew about Catalist coming to the market as may have been easier and cheaper than USX.

Perhaps didn't know about Catalist.

But seemingly Catalist more regulated than Unlisted?? What are the benefits of a licensed stock exchange? (catalist.co.nz) (https://www.catalist.co.nz/info/blogs/BenefitsOfALicensedStockExchange)

[percy]

Not clear to me either! Feel it really needs to be easy to understand and it would be very easy to have a current value of their holdings on their website updated daily and from this a fair value of each share could be easily calculated. I to am interested in this but will not be buying shares as it is relatively simple to invest yourself with no ongoing fees and you get to keep the income from the coins if staked. I wonder if they knew about Catalist coming to the market as may have been easier and cheaper than USX.
Beyond me.
Nothing seems to make any sense to me.
Totally off my radar now..

[Sideshow Bob]

Beyond me.
Nothing seems to make any sense to me.
Totally off my radar now..

I know you've been busy on Unlisted and follow a number of companies - understand your stance! I don't understand either......

Investing 101 if you can't understand (or in this case can't understand how its valued) then don't invest in it.

[Tony Two Gloves]

I know you've been busy on Unlisted and follow a number of companies - understand your stance! I don't understand either......

Investing 101 if you can't understand (or in this case can't understand how its valued) then don't invest in it.
I wonder if this answers our queries?

NOTE 8: SHARE CAPITALThe Company has 97,000,000 Class A shares on offer of which 590,127 (2020: 185,880)have been issued and 3,000,000 Class B Shares that have been issued to the foundingshareholders. Both Class A & Class B shares have no par value.
NOTE 8: SHARE CAPITALThe Company has 97,000,000 Class A shares on offer of which 590,127 (2020: 185,880)have been issued and 3,000,000 Class B Shares that have been issued to the foundingshareholders. Both Class A & Class B shares have no par value.

[Sideshow Bob]

I wonder if this answers our queries?

NOTE 8: SHARE CAPITALThe Company has 97,000,000 Class A shares on offer of which 590,127 (2020: 185,880)have been issued and 3,000,000 Class B Shares that have been issued to the foundingshareholders. Both Class A & Class B shares have no par value.
NOTE 8: SHARE CAPITALThe Company has 97,000,000 Class A shares on offer of which 590,127 (2020: 185,880)have been issued and 3,000,000 Class B Shares that have been issued to the foundingshareholders. Both Class A & Class B shares have no par value.

Info been looking at from the companies register: Shareholdings (companiesoffice.govt.nz) (https://app.companiesoffice.govt.nz/companies/app/ui/pages/companies/6950493/shareholdings) So I'm guessing the A class shares are being dribbled out as new investors buy in?

The Class A/B shares ties in with their constitution:

2.4 Rights attaching to Class A Shares and Class B Shares Unless otherwise provided by the terms of issue or by this Constitution:

(a) The Class A Shares confer on the holder each of the following rights:P a g e 5 | 34
(i) holders of Class A Shares are entitled to 97% of the total voting rights of all Shareholders in proportion to their Shareholding
(ii) Subject to clause 4 of this Constitution, holders of Class A Shares are entitled to not less than 97% of all Dividends authorised by the Board, to be distributed to the holders of Class A Shares in proportion to their Shareholding;
(iii) Upon the liquidation of the Company not less than 97% of the Surplus Assets shall be distributed to the holders of Class A Shares in proportion to their Shareholding.
(b) The Class B Shares confer on the holder each of the following rights:
(i) holders of Class B Shares are entitled to 3% of the total voting rights of all Shareholders in proportion to their Shareholding;
(ii) Subject to clause 4 of this Constitution, holders of Class B Shares are entitled to not less than 3% of all Dividends authorised by the Board, to be distributed to the holders of Class A Shares in proportion to their Shareholding;
(iii) Upon the liquidation of the Company not less than 3% of the Surplus Assets must be distributed to the holders of Class B Shares in proportion to their Shareholding.

My main query is how they value themselves at $3.99.

As an aside, NBR article behind the paywall: One-of-a-kind crypto offer fails to take off | NBR (https://www.nbr.co.nz/analysis/one-kind-crypto-offer-fails-take)

[Tony Two Gloves]

Info been looking at from the companies register: Shareholdings (companiesoffice.govt.nz) (https://app.companiesoffice.govt.nz/companies/app/ui/pages/companies/6950493/shareholdings) So I'm guessing the A class shares are being dribbled out as new investors buy in?

The Class A/B shares ties in with their constitution:

2.4 Rights attaching to Class A Shares and Class B Shares Unless otherwise provided by the terms of issue or by this Constitution:

(a) The Class A Shares confer on the holder each of the following rights:P a g e 5 | 34
(i) holders of Class A Shares are entitled to 97% of the total voting rights of all Shareholders in proportion to their Shareholding
(ii) Subject to clause 4 of this Constitution, holders of Class A Shares are entitled to not less than 97% of all Dividends authorised by the Board, to be distributed to the holders of Class A Shares in proportion to their Shareholding;
(iii) Upon the liquidation of the Company not less than 97% of the Surplus Assets shall be distributed to the holders of Class A Shares in proportion to their Shareholding.
(b) The Class B Shares confer on the holder each of the following rights:
(i) holders of Class B Shares are entitled to 3% of the total voting rights of all Shareholders in proportion to their Shareholding;
(ii) Subject to clause 4 of this Constitution, holders of Class B Shares are entitled to not less than 3% of all Dividends authorised by the Board, to be distributed to the holders of Class A Shares in proportion to their Shareholding;
(iii) Upon the liquidation of the Company not less than 3% of the Surplus Assets must be distributed to the holders of Class B Shares in proportion to their Shareholding.

My main query is how they value themselves at $3.99.

As an aside, NBR article behind the paywall: One-of-a-kind crypto offer fails to take off | NBR (https://www.nbr.co.nz/analysis/one-kind-crypto-offer-fails-take)
Would it be if they had Crypto valued at $3.5M as at 31/3 divide by the 590,000 shares would equate to $5.93 which I believe was there SP around that date. Some of the coins they have are down around 50% from there highs so the SP at $3.99 would their Crypto value now be $2.3M? I really have no idea but the Company needs to clarify if they want to get some shares trading.

[Entrep]

Their strategy seems very, very basic. Why not just buy BTC and ETH and hold it yourself? You are giving up a lot for exposure to crypto this way. Liquidity, control and security chiefly.

[Tony Two Gloves]

Their strategy seems very, very basic. Why not just buy BTC and ETH and hold it yourself? You are giving up a lot for exposure to crypto this way. Liquidity, control and security chiefly.
Tend to agree not to mention the interest earnt by staking various coins. They seem to want to play on the fact that it is quite difficult to set up but in reality it is very simple and you won't lose anything o management fees etc.

[Entrep]

It's extremely simple and secure. You are far worse off in this investment IMO.

I could literally start the exact same fund tomorrow. What's the point or advantage to investors?

Liquidity, control and security.

[Entrep]

It's extremely simple and secure. You are far worse off in this investment IMO.

I could literally start the exact same fund tomorrow. What's the point or advantage to investors?

Liquidity, control and security.

[Sideshow Bob]

Would it be if they had Crypto valued at $3.5M as at 31/3 divide by the 590,000 shares would equate to $5.93 which I believe was there SP around that date. Some of the coins they have are down around 50% from there highs so the SP at $3.99 would their Crypto value now be $2.3M? I really have no idea but the Company needs to clarify if they want to get some shares trading.

Yes, could be the answer.

But from the looks of it, no real difference between the Class A & B shares though......

[nztx]

Interesting what is classed as "Comprehensive Income" & presentation
with gains on the Crypto..

Going to be some interesting times ahead If the Taxman decides crypto
is to be considered like normal fiat currencies .. ;)



Similarly Crypto's designation in the 2021 Accounts as an Intangible Assets too .. ;)

[nztx]

Yes, could be the answer.

But from the looks of it, no real difference between the Class A & B shares though......


The shares between A & B shares appear to be linked to 100 million shares - 3.0 mil issued "B"
and the rest 97.0 mil issued & unissued 'A's'.

As more than the 590,127 A's are issued of the 97.0 mil A's then value per share will likely move,
depending on movements in the underlying Crypto held & consideration for new more shares issued.

The value of the shares looks like it could be as wildly volatile as the basket of Crypto currencies
it holds .. it may be a case of picking an entry time - if any available on a favourable "Low" day
assuming one is still enthused & game enough to want to dive in & start swimming .. ;)

[Sideshow Bob]

Price down to $3.38

[Sideshow Bob]

Latest shares issued at $2.00 each. Ouch....

No live offers or bids.